Oil panel: Arctic drilling needed
Shale rock boom won’t last much longer, report finds.
— The U.S. WASHINGTON should immediately begin a push to exploit its enormous trove of oil in the Arctic waters off of Alaska, or risk a renewed reliance on imported oil in the future, an Energy Department advisory council said in a study submitted Friday.
The U.S. has drastically cut imports and transformed itself into the world’s biggest producer of oil and natural gas by tapping huge reserves in shale rock formations. But the government predicts that the shale boom won’t last much beyond the next decade.
In order for the U.S. to keep domestic production high and imports low, oil companies should start probing the Artic now because it takes decades of preparation and drilling to bring oil to market, according to a draft of the study’s executive summary.
“There will come a time when all the resources that are supplying the world’s economies today are going to go in decline,” Rex Tillerson, CEO of Exxon Mobil and chairman of the study’s committee, said in an interview. “This is will be what’s needed next. If we start today it’ll take 20, 30, 40 years for those to come on.”
The study, produced by the National Petroleum Council at the request of Energy Secretary Ernest Moniz, comes at a time when many argue the world needs less oil, not more. U.S. oil storage facilities are filling up, the price of oil has collapsed from over $100 a barrel to around $50, and prices are expected to stay relatively low for years to come.
At the same time, scientists say the world needs to drastically reduce the amount of fossil fuels it is burning in order to avoid catastrophic changes to the earth’s climate.
The push to make the Arctic waters off of Alaska more accessible to drillers comes just as Royal Dutch Shell is poised to restart its troubled drilling program there.
The company has little to show after spending years and more than $5 billion preparing for work, waiting for regulatory approval, and earlystage drilling.
After assuring regulators it was prepared for the harsh conditions, one of its drill ships ran aground in heavy seas near Kodiak Island in 2012. Its drilling contractor, Noble Drilling, was convicted of violating environmental and safety rules.
Environmental advocates say the Arctic ecosystem is too fragile to risk a spill, and cleanup would be difficult or perhaps even impossible because of weather and ice.
“If there’s a worse place to look for oil, I don’t know what it is,” says Niel Lawrence, Alaska director for the Natural Resources Defense Council. “There aren’t any proven effective ways of cleaning up an oil spill in the Arctic.”
But global demand for oil, which affects prices of gasoline, diesel and other fuels everywhere, is expected to rise steadily in the coming decades — even as alternative energy use blossoms — because hundreds of millions of people are rising from poverty in developing regions and buying more cars, shipping more goods, and flying in airplanes more often.